Loeffler's Estate

Gummey, J., Arthur Loeffler died on Aug. 25, 1920, leaving a will, by which he bequeathed his entire estate to his wife, Henrietta Loeffler. The appraiser appointed by the Register of Wills for Philadelphia County appraised for purposes of taxation certain corporate stocks registered in the name of the decedent on the books of the R. J. Ederer Company, of Illinois, the R. J. Ederer Thread Company, of Pennsylvania, and the R. J. Ederer Net and Twine Company, of Maryland. The appraised value of the stocks amounted to $436,557, and, after the allowance of certain deductions, an inheritance tax was assessed in the sum of $8447.20; whereupon Henrietta Loeffler took this appeal and claims that the stock, though registered in the name of her husband, is equitably hers; that he was a trustee for her and was not himself the owner thereof. As the issue before the court was limited preliminarily to the ownership of the stock, the presiding judge properly held that if Mrs. Loeffler desired him to adjudicate the questions raised, she must submit herself to his jurisdiction; and he was undoubtedly right in refusing to let her testify in support of her claim, because it was adverse to the estate of her husband. On the question as to the ownership of the stock, the presiding judge found the facts against Mrs. Loeffler, and accordingly he dismissed the appeal and confirmed the assessment of the tax. A majority of the court are of the opinion that the evidence is sufficient to support his findings, and that, therefore, the exceptions should be dismissed. While recognizing that there exists between husband and wife that confidential • relation which requires on the part of a husband convincing proof that in a transaction between them she acted freely and intelligently and with a thorough understanding of the transaction and of its consequences, it is to be remembered that in the present instance the transfer of the stock by Mrs. Loeffler to her husband was a free and voluntary act on her part; she was under no mental disability, and, under the state of facts developed at the hearing, she must have had full knowledge of the circumstances. The transaction is without the slightest taint, of fraud, accident or mistake, nor is there an allegation of undue influence, such as was present in Darlington’s Appeal, 86 Pa. 512; and in Morrish v. Morrish, 262 Pa. 192, urged upon us by counsel, the wife’s case was stronger than the case at bar; the husband was living, and the rights of a third party, to wit, the Commonwealth, had not intervened. Granting, for the sake of argument, that because of the existence of a confidential relation the burden of proof rested, in the first instance, upon the Commonwealth, there is, in our opinion, sufficient in the evidence to shift the burden. As showing Mrs. Loeffler’s intention to make her husband the absolute owner of the stock, particular attention may be called to the following: As to the one share which Mrs. Loeffler transferred to her husband in trust, she released the trust; the dividends on the stocks transferred to Loeffler were not only paid to him, but were also retained by him. In 1901, thirteen days after the second transfer of stock, Mrs. Loeffler and her husband executed a joint will, in which it was provided: “In case either of us should survive the other, all our property, real, personal and mixed, shall go to the survivor.” At this time Mrs. Loeffler had an interest in R. J. Ederer & Co., a copartnership, and her husband was the owner of 251 shares in the R. J. Ederer Company, so that each acknowledged some sort of ownership in the other, to which the survivor was to succeed; and if, as argued, the purpose of giving the decedent a paper title was to confer control upon him and dignify his position, this theory would seem to fail as to the 260 additional shares issued to Mrs. Loeffler in 1904, and which she did not transfer to him until 1909. Again, the result of the transfer of the stocks to [394] the decedent was to place him. in a position where, if she died first, it would not be necessary for him to account to her estate; while, on the other hand, in the event that he died first, their joint will protected her. This negatives the thought that at the time of the transaction the parties contemplated establishing a trust relationship. Mr. and Mrs. Loeffler were childless. Had she predeceased him, intestate, he would have been free from the obligation to will her the stocks. The exceptions are dismissed.